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Business should pay for degrees in subjects such as science and technology, with public funding directed towards the arts and humanities, according to the head of the Institute of International Education.

In an interview with Times Higher Education, Allan Goodman said it was the duty of universities to produce "as many poets as physicists" and argued that more businesses should show willing to fund the more "commercial" subjects.

"It's expected that private investors will want their money to go towards the subjects that are more vocational," he said.

"Governments should hear that, and maybe shift more resources to support culture and the arts, subjects that won't get that private funding."

His comments follow the decision by the UK's coalition government to reduce public funding for universities, cutting the teaching grant to a level that will leave arts and humanities courses funded solely by higher student contributions.

Dr Goodman said a shift in attitude was required from business to redress this imbalance.

Acknowledging that volunteering to fund commercial subjects was "not a natural act for either side", he said: "The university is a very stable institution that doesn't want to change too fast, and the job of business is to do business, not remake universities, but the two do need to get together."

He said the global plight of the arts and humanities was "very interesting" from a US perspective because "living in America you can start to think, 'Gee, that's only happening to us'."

The issue is important to academics because most do not work in a "technological institution", he pointed out, but rather "in a university, where arts, language, culture have a place alongside subjects such as science and technology".

Dr Goodman also commented on the planned immigration reforms in the UK, where the Conservative-led coalition intends to significantly reduce the number of student visas - mainly for those studying below degree level - as well as cap the number of skilled workers from outside the European Union, which will include some academics.

He said the full effects of the proposed changes might not be felt immediately, arguing that students "need and will find" ways around restrictions because of a shortage of student places globally.

"Whatever legal changes happen around immigration, (demand is) not influenced; students need to find places to go and it's going to be one of a small handful of countries, including the UK and the US."

He said it would take "a year or two" to determine whether the visa reforms constituted "a real sea change" in terms of international attitudes to studying in the UK.

Dr Goodman also dismissed suggestions that distance learning could replace international travel for students.

Last year, Bill Gates, the founder of Microsoft, predicted that the internet would soon become more important to higher education than universities. Speaking at the Techonomy Conference 2010, he said that "place-based learning" was being superseded and that in five years it would be "five times less important than it is today".

However, Dr Goodman insisted that web-based learning was "no substitute" for travel.

"We know that half of what students learn is outside the classroom. They learn about the world through being with people from other countries and hearing their reactions to our policies and our cultures. We need both online education and a physical mix of students," he said.

Study abroad can teach students "self-reliance and toleration", he said, something that "you cannot do online because you've got to be next to somebody who looks different, who speaks differently".

Despite the benefits, he said that many students were increasingly reluctant to travel.

"The interest in studying beyond our borders is either slowing or plateauing," he said. He added that he hoped the trend could be reversed.